Thursday, August 28, 2003

The presidents of Venezuela and Brazil called for creating a powerful South American trade bloc this year before continuing talks on a U.S.-backed hemispheric free trade zone.

Brazil's Luiz Inacio Lula da Silva and Venezuela's Hugo Chavez said Tuesday that integrating South America's two largest trading blocs, Mercosur and the Andean Community, comes before any hemispheric deal. They set a Dec. 31 deadline for a regional trade union.

Silva and Chavez argue the Free Trade Area of the Americas � a proposal to create the world's largest trading zone � will deepen Latin poverty by forcing local industry to compete against developed nations.

"We're not saying that we don't want to negotiate with the United States, because it is very important for Brazil. But we must integrate first to negotiate with that country," Silva said at a news conference.

South American nations can create "a power bloc" to confront the FTAA, Chavez said. "Only united can we break the chains that oppress us.

. . . Brazil has warned it won't continue with FTAA negotiations unless Washington relaxes trade barriers on Latin American exports such as oranges and sugar. Chavez claims the FTAA is the latest incarnation of economic "colonialism" and vows to put any deal to a popular vote.

The possible unification -- at least politically -- of Mercosur and the Andean Community is big news. Once the WTO ministerial in Cancun is behind Bush, he will start pushing the FTAA hard again. Latin American looks ready for the fight.